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of Management Cases

HRM at Affluent Advertising (Pvt.) Ltd


Faiza Muhammad and Farzad Rafi Khan
Asian Journal of Management Cases 2010 7: 177
DOI: 10.1177/097282011000700206

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ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198
SAGE PUBLICATIONS LOS ANGELES/LONDON/NEW DELHI/SINGAPORE/WASHINGTON DC
DOI: 10.1177/097282011000700206

HRM AT AFFLUENT ADVERTISING (PVT.) LTD


Faiza Muhammad
Farzad Rafi Khan
Affluent Advertising establishes a Human Resource (HR) department in response
to increasing external competition and internal turnover. The department’s
prerogative, however, is primarily limited to the espousal of administrative dis-
cipline and communication of top managements’ decisions to employees, after
anchoring them in rhetoric of management knowledge and organizational
efficiency. An early and unexpected failure of this department raises several ques-
tions regarding its need and significance as well as its future in the organization.
At a more broad level, the case highlights the use or abuse of HR department as
a tool for reinforcing systems of dominance and legitimizing the self-interested
decisions of top management and firm owners. In doing so, it not only challenges
the unitarist theories of management that treat workplace as an integrated and
harmonious entity, wherein employees and employers share common interests,
but also contests the self-alleged neutrality, objectivity and impartiality of main-
stream management practices by bringing to light its dark, biased and (value and)
power-laden aspects. It thus sheds light on the real agenda behind the HRM develop-
ment, and elucidates how the recommendations (structural, strategic, cultural and
procedural) forwarded by so-called impartial HR departments are actually em-
bedded with patterns of organizational power distribution. Lastly, the case also
elaborates how various structural arrangements, traditionally known for their
effectiveness (that is, Matrix and Product Team configurations), can adversely impact
work environment, if employed without need, for bureaucratic purposes solely.
Keywords: Critical management studies, bureaucracy, power, Human Resource
Management, symbolic interactionalism, scientific management

This case study was written by Faiza Muhammad under the supervision of Assistant Professor Farzad
Rafi Khan to serve as a basis for class discussion rather than to illustrate either effective or ineffective
handling of an administrative situation. Names of individuals and locations have been disguised on the
request of Affluent Advertising (Pvt.) Ltd to maintain confidentiality.
ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

On a quiet morning of August 2007, Intisar Arshad, the Chief Executive of Affluent
Advertising (Pvt.) Ltd, looked distressed in his Karachi office. He had spent a sleepless
night pondering fruitlessly over how to conduct the emergency meeting that he had
summoned. All of the different department heads had also been asked to attend this
meeting. The agenda was to decide the future of the Human Resource (HR) department
at Affluent, and despite the options in his mind, Intisar was unsure and perplexed
about which option to exercise.
The HR department was established, about a year back, to alleviate concerns
regarding declining market share and soaring rate of absenteeism as well as high em-
ployee turnover within the organization. To Intisar’s surprise, however, grievances
and turnover within the HR department soon surpassed that for the rest of the organ-
ization. Topping it off was the mutual aversion among employees and top management
towards this newly established entity. This was followed by the resignation of the
Head of the HR department. Besides the discomforting tone of the resignation letter
(see Exhibit 1), Intisar’s generous investment and high expectations from the depart-
ment in fixing the continually declining performance figures, finally prompted him
to call for an urgent meeting.

COMPANY BACKGROUND
Established in 1981, Affluent came into existence as a much needed entity for meeting
the growing demand of the country’s business circle for print and electronic media
advertising. In addition, it also served as an entrepreneurial milestone in the career
of Iftikhar Arshad, a renowned journalist of the country.
Affluent was initially based in Karachi but with the passage of time, offices were
opened in Lahore, Peshawar, Quetta and the capital city of Islamabad. Each of these
branches was not only registered independently but also run autonomously by a dif-
ferent family member. Thus, all financial matters of each branch were independently
handled and individual annual reports were published. Clients were divided on the
basis of location, that is, a company based in Lahore was served by the corresponding
branch, and so forth. If the clients were geographically dispersed, the location of its
headquarter determined the serving branch. The profit generated by each branch
belonged to the family member heading that branch.
Structurally, each branch was designed identically, that is, around functional
areas such as client services, creative and copywriting services, graphic designing
and printing, media buying, event management services, business development, ac-
counts and administration (see Exhibit 2). The founding culture of the organization

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was rigid and encouraged centralization, efficiency, high productivity and individual
responsibility. All company policies were strictly written in black and white and a man-
ual containing standard operating procedures was given to each new employee.
Affluent usually hired fresh graduates with 10–15 years of education, who willingly
offered their services at much lower wages than the industry norms. These employees
learned through trial and error, and eventually replaced the more experienced lot,
thus rendering a high retention rate. Those who did not show any improvement were
tested in other departments and only rarely terminated.
With these design attributes, Affluent enjoyed the fastest growth rate for about a
decade. Its clientele became the second biggest in the industry. It also gained a mono-
poly in the government sector, with names of almost all the ministries on its list of
permanent clients (see Exhibit 3). In addition, the low advertising budgets of most
local firms also contributed in enhancing the market share of its modestly priced ser-
vices. As a result of Affluent’s success in Pakistan’s advertisement industry, as well
as the familial ties of all the branch heads with the founding member, all subsequent
branches of the company inherited the same basic design elements.
In 2000, Iftikhar Arshad transferred the leadership of his personally managed
Karachi branch to his son, Intisar Arshad, who had just completed his postgraduate
studies in the West. Intisar had recently earned his second masters degree in business.
The Karachi branch thrived under its new leadership with revenues reaching their
record highest in 2002. Its number of employees almost doubled from 100 to 197
within the span of these two years. Soon after, however, the downfall began and the
lowest revenues in Affluent’s history were reached within a span of three years. This
was largely due to more intense competitive pressure from new entrants (that is,
international advertising agencies) who were aggressively expanding their operations
in Pakistan by luring talent away from Pakistani advertising agencies with offers of
more rewarding and professional work environments.

AFFLUENT KARACHI: RESPONSES TO ENVIRONMENTAL CONTINGENCIES


To operate more effectively against the new players, Intisar decided to bring about
three major changes within his branch design. First, to effectively cater for market
share loss, he established a production department and held it responsible for audio
and video recordings of electronic advertisements. Second, Intisar set in place a Web
designing department to take care of both, demands for Web advertisements and
complete website designing. Together, these changes were to cater to and build on

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the electronic media market. Finally, the in-house failure to alleviate turnover and
employee satisfaction concerns led Intisar to hire human resource management
professionals along with a Senior Director, Zaheer Ahmad, to head the Human Resource
Management (HRM) department. Zaheer had twelve years of experience in the field,
and was credited for introducing some cutting-edge HR systems in his earlier work
experiences. However, neither he nor his assistant mangers had any prior experience
in the advertising industry.

HRM SYSTEM DEVELOPMENT AT AFFLUENT


Immediately after joining Affluent, Zaheer along with his two assistant managers,
spent a great amount of time in studying the prevalent organizational systems and
trying to understand the internal causes of employee dissatisfaction and turnover.
Several issues discovered by them are included in the following.

Departmental Intolerance
Affluent Karachi was faced with an implicit tussle and intolerance between three of
its principal or line departments, that is, client services (CS), creative and graphic
designing.
Following are some comments by several members of these departments:

The CS people bring incomplete and sometimes misleading information regarding


customer demands. Not surprisingly, then, the advertisement copy that the team
prepares tends to come back for revisions and then the department is blamed for
delay in delivery and cost increase.
(Creative Department Head)
We are hardly ever told about the preferred shapes, colors or expected theme of
print ads required by the customers. This is of course the duty of the CS department.
But they aren’t the only culprits. The creative people also revise their copies twice
or thrice. Obviously then our designs need corresponding changes and new ads
require reprinting and re-pasting. But it is not our fault that the costs are rising up.
Why should we then take the blame for somebody else?
(Senior IT Manager, Graphic Design Department)
Customers are never sure initially about what exactly they require. Asking a lot of
questions offends them, sometimes to an extent where they directly tell us that

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it’s our job to decide and come up with appropriate ideas. Another problem is that
we aren’t assigned customers on permanent basis and our previous knowledge
regarding client preferences ends up lost or forgotten.
(Client Services Manager)
On the basis of these interviews, the newly established department forwarded a pro-
posal of structural change within the organization. According to the proposed struc-
ture, each member of the CS, creative and graphic designing department was assigned
the long-term responsibility of dealing with a particular client. Thus, within each
department there was a member responsible for meeting the requirements of, say,
the Ministry of Health. This structural arrangement implicitly tied members of
the three departments into various teams. Each team was to include two members
from the creative department and one from the other two. Furthermore, one member
of the creative department was also going to accompany the CS executive in the initial
stages of the new campaigns.

Absence of Job Descriptions and Training Opportunities


Interviews with several employees throughout the branch exhibited an overall dis-
satisfaction with the absence of job descriptions. According to a junior CS executive:
I hardly know what my job is. When I joined I was given a thick manual of SOPs.
It had everything except my job outline. This void grants managers and executives
to use us at their convenience. Sometimes I have even been asked to pick up lunch
from a restaurant.
To overcome this issue, the HR department, under the leadership of Zaheer, set out
to prepare specific job descriptions and thus, eradicate any confusion about what one
was required to do. These job descriptions were designed idiosyncratically for each
hierarchical level of each department after conducting interviews and an organization-
wide survey. Multiple people were interviewed for each job description.
On the basis of these job descriptions, several in-house training sessions were also
designed to develop soft skills, for example, team building, time management, conflict
management and resolution and stress management. Some externally offered courses
on core organizational issues such as CS orientation, effective presentation making
and computer programming were also recommended. Each department was required
to attend quarterly arranged in-house sessions. Additionally, members of any one
department were to be selected, according to their turn, for external trainings every
month.

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Compensation-based Concerns
At Affluent Advertising, salary distribution was generally unpredictably delayed for
10–20 days. This was a major source of dissatisfaction and complaints, especially for
those individuals who were low in hierarchy and whose salary amount did not grant
them the leverage to extend expenditure. Particular concerns for these employees
were frequent embarrassments related to the payment of house rent and children’s
school fee, which even made them willing to switch jobs for the same salary level,
only if they could be paid on time.
At the middle level of employee hierarchy, there also existed a dominant feeling
of internal and external compensation inequity. The star performers believed their
efforts were not being rewarded and that they were consistently being paid less than
the average performers on account of joining the organization later than them. When
Intisar was approached by Zaheer, in this regard, his response was the following:

That’s not the real issue. Actually our competitors approach these inexperienced
lads and offer jobs at exactly twice their present salaries. Naturally, they leave. But
why should we disappoint our loyal and committed workers for this lot of uncom-
mitted opportunists? We should not.

To resolve this dilemma, the HR department designed appraisal systems that built
on corresponding job descriptions. These appraisals included a mix of traits, goals
and competencies required for each job cadre. The exact percentage mix varied a
little based on the exact nature of job. For example, business development and media
buying departments had a greater percentage allocated to goal achievement than the
administrative or accounts departments, where a greater percentage was allocated to
competencies. The average percentage allocated to each section was 15 per cent for
traits, 35 per cent for goals and 50 per cent for competencies.
Appraisals were to be held on a quarterly basis by the department heads, after which
employees were sent a copy of their evaluations. This was followed by self-evaluations
and counter arguments. Finally, each employee was to meet with the department
head, in person, and have a personalized discussion regarding performance gaps and
improvements. Goals for the next quarter were also mutually decided during this
meeting. The appraisals for the top management team and department heads were
to be carried out by Intisar, while HR managers also collected informal or anonymous
feedback through their respective subordinates.

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On the basis of individual rankings, a merit-based bonus plan was designed, which
was to replace the existing annual increment system. According to the plan, those
reaching a mark of excellence, in the quarterly appraisal, were to be eligible for a bonus
amount equal to 80 per cent of their monthly salaries. The amount for those making
it to good and above average categories of performance was 50 per cent and 25 per cent
of monthly salaries, respectively.
Finally, in light of the newly carved job descriptions and compensation plan, a
credential-based rigorous selection criterion was also devised to replace the earlier
patronage-based selection and informal recruitment through internal sources. The can-
didates were first interviewed on telephone to check presence of mind and sharpness.
This was a sort of quick elimination round. Those who passed were called for a written
test in which they were given short cases based on an advertising agency. Here, the
candidates were to narrate what they would do if they were in the shoes of the case
character. Towards the end of the test, candidates for the core departments were also
asked to design a campaign comprising a logo, slogan and radio or print advertisements
for given client requirements. Those who passed the test were asked to prepare a
10-minute presentation, within 24 hours, on the campaign they had designed. The
selected candidates were finally called in to discuss their salary package and how they
could earn above industry standards on the basis of their performance.
After finalizing these structural changes, a report was sent to the CEO for approval.
It took the HR department about ten months to prepare the first draft of the proposed
report.

GRIEVANCE-VOICING MECHANISM
A lack of grievance mechanism was a largely held gripe in Affluent. Employees ex-
pressed a need to voice their opinions anonymously. When asked for the reason behind
this anonymous grievance registration, a female graphic designer replied:

Several of my colleagues made the mistake of publically raising their concerns,


in the past. They were all terminated within a span of two months on trivial
grounds; one simply because she was often seen with a male colleague at the lunch
table. The guy is still here because he hadn’t voiced any public grievance.

To overcome this issue, the HR department arranged several complaint boxes. One
was hung in the lunch room and others at the entrance of each floor.

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Alteration in Administrative Policies


The newly established HR department extended its list of policy recommendations to
include policy statements for frequent absenteeism and leave, late arrival, deliberate
prolonging of clients’ visiting time, demand of unreasonably high fuel charges for client
visits, unacceptably high mobile usage in the name of CS, recurrent loan applications,
etc. These policy statements are illustrated in Exhibit 4.
The suggested leave, absenteeism and late arrival policy did not accommodate any
absences without salary deduction. However, it did allow two paid leaves, at maximum,
per month. The leave application earned consideration only if it was submitted
twenty-four hours in advance. All unavailed leaves could be encashed at the end of
the year. Finally, any late arrival after 9:15 a.m. was counted as absenteeism.
According to the transport and fuel policy, CS executives were allocated a weekly
fuel expenditure of Rs 700. This was regardless of the number of visits made to dif-
ferent clients or the nature of relationships shared with them. The executives were
to maintain a record and minutes of their client visits and justify the time expended
if so desired by the administrative department.
Akin to the transportation disbursements, a fixed chargeable amount of Rs 500 per
month was authorized for the CS executives on account of mobile usage. For employees
of all other departments, the figure was reduced to Rs 200. Any bill amount exceeding
this limit was deductible from the salary of the concerned employee.
Further, a loan policy was introduced which prohibited any loan grant above
200 per cent of the salary amount. The loan had to be returned, through salary deduc-
tions, within a maximum period of 4–6 months. Lastly, a second loan could not be
applied for before the previous one was cleared.
In addition to the above mentioned recommendations, HR department also drafted
a policy statement for overtime, which recommended monthly payments for all hours
spent on the job after 6:00 p.m., if approved by the employee’s department head.
Finally, a printing policy was also forwarded that restricted the printing facility to
the graphic design, creative, HR and accounts departments only. While the latter two
were granted unlimited access, the creative copywriters were allowed only four text
pages of black and white prints per copy. Similarly, the graphic designers had to suf-
fice with two black and white image printouts during intermediary stages of adver-
tisement development. A third one was tolerable, but worth high discouragement
from supervisors. Colour printouts were allowed for final versions of print advertise-
ments only.

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RESPONSE TO HR DEPARTMENT’S INITIATIVES


Chief Executive’s Response
After going through the HR department’s proposal, Intisar opted to make many things
simpler. The structural change was rejected on grounds of inappropriateness of pro-
posed configuration. Instead, a different structural arrangement was proposed, after
joint consultation with an external consultant and department heads of CS, creative
services and graphic design. This structure is shown in Exhibit 5A. It necessitated the
division of clients into three sets and hiring a new incharge for each set. Departmental
employees were allocated to different teams on temporary or short-term basis. This
arrangement was however soon replaced by a new structural form, which is shown
in Exhibit 5B. In this structure, the client heads were made subordinate to the de-
partment heads, who assigned, on a more long-term basis, particular members of their
department to the client teams. Moreover, the client heads were instructed to elicit
participation from the team members designated to them, in designing advertisements.
Yet, the structure caused confusion and restlessness among employees regarding their
reporting channels, and failed to solve not only the cost issue but also the increasing
conflict and anxiety levels.
In parallel to these changes, Intisar asked each department head to ensure a common
job description for all hierarchical levels of a given department. Additionally, he also
recommended a uniform appraisal form for the entire organization (see Exhibit 6). This
form was to be filled by the assistant HR managers, instead of the department heads.
The employees were to be kept in the dark about their evaluations. Only the bonuses
and promotions, distributed by Intisar, were to be announced, if any. A lunch or tea
ceremony of two hours and thirty minutes was to be arranged for this purpose, by
the administrative department, in a specially booked banquet hall of good reputation.
When such arrangements were not possible, catering services could be employed in
the executive meeting hall. In either case, choice of hotel or caterers was subject to
voting between the options presented by the administrative department. Attendance
was a must for all white-collar employees, though exceptions could be granted to the
top management team. Blue-collar employees were excluded from the event.
The selection mechanism was also altered. At the present time, most of the new-
comers came through acquaintance with Intisar’s family. They were neither interviewed
nor tested, rather called only for a meeting with the HR managers. This meeting was
more often ceremonial, in which their salary was decided and introduction to their
department head made. Further, the recommendation for external training sessions

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was rejected, on account of lack of budget. In-house training was approved, which
the HR managers were to design without any raise in base salary or bonus earning.
Finally, it was left to the department heads to shape the on-the-job training track of
their employees, observe their progress and assign clients and goals accordingly.
In terms of the administrative policies, the overtime recommendation was overruled
straight away, while the transportation, printout, leave, absenteeism and late arrival
policies were assumed without any delay. The loan policy was accepted but with an
added condition of signing a legal document before approval of the loan, stating the date
of return (see Exhibit 7). The mobile usage policy was altered from monetary to free-
minute allocation (see Exhibit 8). These newly decided policies were communicated
to the administrative department for implementation.
Intisar and his top management team, that is, the department heads (other than the
HR director), also kept the leverage to terminate any of the employees at any time. The
decision, however, was to be communicated by the HR managers, who had to frame it
in the previous performance appraisal held by them. Often the HR managers were also
directed to ask the employee to submit his resignation rather than directly terminat-
ing him. The remaining dues of the leaving employees were not immediately cleared
and a couple of months could pass before final clearance from Affluent. This ensured
that they could not blow whistles or exhibit explicit resistance against the decision.
Lastly, Intisar announced several one-day outdoor trips and dinner ceremonies
such as Iftar, Eid Millan, etc., to control employee turnover and dissatisfaction.

Departmental Heads’ Response


The overall reaction of the department heads to the HR department in itself as well
as its initiatives was disapproving and discouraging. The exact expression varied from
person to person, though the heads of the three departments that needed the most
team spirit, that is, CS, creative services and graphic designing comprised the explicit
adversaries.
Commenting on the response of these directors, an assistant manager HR stated, ‘Simi-
lar to their intolerance for each other, they were also intolerant of our department, and
treated it as an unwanted outsider intruding into their private circle. They made sure
to convey their mockery of our work and its irrelevance to the advertising industry.’

Response of Director Client Services


Client services (CS) was headed by Noman Raza. He was known for his strictness,
punctuality, regularity, high work standards and straightforwardness. The general

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impression was that anything less than perfection was unacceptable. When discussing
his personality, a subordinate commented: ‘There is a flipside to his outer rigid persona,
i.e., he is extremely paternal and caring when it comes to his subordinates. He covers
our unintentional mistakes, defends our position, and fights for our promotions and
salary increments before the chief executive.’
In terms of the initiatives proposed by the HR department, Noman showed in-
difference towards the training and job description–related proposals. There was,
however, loud and clear opposition with respect to all structural changes, whether
or not recommended by the HR department. This was particularly true for the
dual reporting lines. In addition, appraisal-based pay system was also a bone of
contention for him. As a consequence, he refused to fill the appraisal forms of his
subordinates.

Response of Director Creative Services


Naqvi Ameen, the Director of Creative Services, was a thin and middle-aged man, who
also taught part-time at the National University of Modern Languages (NUML). At
Affluent, his reputation was of a talented intellectual, reserved but abstruse by nature.
Another attribute generally associated to him was clever-witted satire and sarcasm.
When elaborating his reaction to the HR department, an assistant HR manager
narrated the following:

Very often, though indirectly and between the lines, he would pass statements re-
garding the impulsiveness of Mr Intisar and his habit of making hasty decisions
without expending necessary consideration and thinking. The bottom line of all
such statements would more or less revolve around bad endings of such decisions.
Also he would tactfully call us the most important people at Affluent, while his
body language and gestures said the exact opposite. It was because of him that our
ex-boss often excused himself from the monthly executive committee meetings.

Response of Director Graphic Designing


Graphic Designing department was headed by Shams Niaz who was a young man
of thirty-five years. He was not highly educated but was very skilled in terms of
aesthetic and schematic design. Belonging from a poor background, he took pride in
his achievements.
According to an assistant HR manager, Mr Niaz’s response to the HR department
and its initiatives was the following:

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Extremely personal, for he deemed us born with golden spoons and abundant
resources to spend on unnecessary fads and study areas. For him, HRM was experi-
ential in terms of learning and anybody could do it, but because Mr Intisar also
had abundant resources he afforded such superfluous pursuits.

Employees’ Response
In addition to aversive responses from department heads, employees also demonstrated
a non-cooperative, unacknowledging and rather abandoning attitude towards both the
HR department’s team and their initiatives. The first and primary source of contention
was seeded from the pay levels of the department managers, which made both the
administrative counterparts as well as non-managerial position holders in the branch,
dissatisfied and hostile.
Coupled with this perceived inequity, the newly proposed appraisal-based pay
system and confusion emerging from repeated structural changes led to the usage
of fowl language in anonymous complaint letters. More so, the resignation letters of
most of the employees hinted at the introduction of the HR department as the root
cause of their departure.
The newly established administrative policies also triggered panic and agitation.
First, the CS executives showed resistance to the late arrival policy on account of
reaching office directly from client visits that could vary in length, from time to time.
Their job, according to them, required flexibility to clients’ preferences of visit times
and a strict enforcement of 9:00 a.m. policy inhibited it. Other departments also
expressed reservations to the policy, especially if long hours of frequent overtime
were a usual part of their jobs. This was particularly true for creative copywriters and
graphic designers. One of the copywriters said the following:

The intensity of our work varies with respect to the number of client orders or ap-
proaching deadlines. During such times we even spend up to 18 hrs in the office,
but that’s of no consequence to the HR people, who never stay after 6 p.m. They
are just concerned with whether or not we reach at 9 a.m. because they simply do
not understand the nature of our work.

Similarly, the mobile usage policies also met with resistance. One CS executive
complained:

Several of our clients are located out of the city. With free minutes as few as 60 to
120 how do they expect us to understand our clients’ needs. Whenever we are on

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the phone, our minds are busy counting the minutes, lest our salary be deducted.
It’s a nightmare.

According to another executive from the same department, ‘Its nonsense that we pay
for the official calls we make to their clients.’
Topping this disapproval was the response from the administration managers
who started shirking their work by calling it HRM’s responsibility to justify their pay
scale. These additional work duties included catering for overtime management and
payment, payroll administration and attendance record keeping. When this matter was
discussed with Intisar, he expressed his approval and considered the HR department
to be in a better position to handle these issues. Administration, for him, was basically
taking care of housekeeping and lunch, services-related supervision, pick and drop
service management, mobile bills grant and taking care of transport fares of client
executives.

MORALE WITHIN THE HR DEPARTMENT


As a result of the negative employee reactions and lack of cooperation from the top
management, morale within the HR department declined sharply. That was, however,
not all.
In the words of an HR manager:

The worst part of it was the manipulation of our department to justify others’
decisions. For example, we were often forwarded requests to consider someone
particular for incentive grant or a job opening, which essentially meant we had
no say of our own.

An accounts manager who shared her room with an HR manager stated the following:

My HRM colleagues felt blamed for the poor decisions and policy designs that were
actually taken by other. They would be often asked to demand resignations from
unwanted employees, in the name of poor performance on yearly goals. The real
underlying reason would be the desire of any one of the top executives to recruit
their acquaintances. The subsequent music was of course to be faced by the HR
department. You see, they were actually only a cover-up conduit for the mess
created by everybody else.

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Further, despite having been the inventors of the incentive system, the HR managers
were hardly ever granted one, because existing employees already had a problem
with their pay scale. I often overheard their expressions of discontentment and
dejection for the way their department was manipulated by different heads. Some of
them were even planning on resigning simultaneously. I didn’t know the resignation
chain would start from their head.

THE EXECUTIVE COMMITTEE MEETING


Intisar glanced at the resignation letter one last time before asking his personal
secretary to send in all the department heads and abstain from any disturbances for
the next one hour. He had decided to open the meeting by eliciting available options
along with their respective pros and cons. The options in his mind were to (a) hire
a new HRM head and proceed accordingly; (b) exterminate the HR department by
merging it with the administrative wing; (c) reinforce the need of the HR department
and pass clear and loud dictations regarding requirements imposed by its practices;
(d) hire a team of consultants for re-devising HR systems at Affluent; and (e) effectively
combine two or more of the above options, or think of any other feasible ones. The devised
action plan was also to determine the new structural configuration of the company.

Exhibit 1
Resignation Letter from Head, HR Department
4th August, 2007
Zaheer Ahmad
Head HR Department
Affluent Advertising (Pvt.) Ltd
Karachi
Intisar Arshad
Chief Executive Officer
Affluent Advertising (Pvt.) Ltd
Karachi

Dear Mr Intisar Arshad,

This is to provide a formal notification of my resignation from the position of Head HR Department at
Affluent, effective immediately.
My journey at Affluent started with the challenging task of establishing a cutting edge HR department.
However, fifteen months of untiring but unappreciative struggle, render it a more appropriate career
move to uproot for better opportunities.

190 FAIZA MUHAMMAD AND FARZAD RAFI KHAN


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Affluent, in my experience, is not yet ready for the commitment required by a thriving and delivering
HR department. It will be some time before the cultural barriers hindering this change are overcome,
the much needed support by top management team is elicited, and a shared and institutionalized vision
is developed in the company. Since these prerequisites primarily ensue and get reinforced directly from
the chief executive office, I find my role passive and rather limited.
For these reasons I have accepted a position elsewhere. My joining is from next week and till then
I am available for any assistance towards this transition.
I wish Affluent good fortune and sincere team.

Best Regards,
Zaheer Ahmad
Source: Company documents.

Exhibit 2
Original Structural Configuration at Affluent Advertising (Pvt.) Ltd

Source: Company documents.

HRM AT AFFLUENT ADVERTISING (PVT.) LTD 191


Exhibit 3
List of Major Clients of Affluent Advertising (Pvt.) Ltd
Pakistan Tourism Development Corporation National Database and Registration
Ministry of Information & Media Development Authority (NADRA)
Pakistan Post Office (Airex, UMS, LPS, Datapost National Highway Authority
and Other Services) Lahore Development Authority
Central Directorate of National Saving Malir Development Authority
Central Board of Revenue Capital Development Authority
Board of Investment National Highways and Motorway Police
Ministry of Health Eden Developers
National Aids Control Programme (NACP) Bahria Town
National Reconstruction Bureau Park View Housing Society
Export Promotion Bureau Gwadar Golden Palms
Pakistan Ordinance Factories D.G. Cement
Privatization Commission Askari Leasing
Election Commission of Pakistan Comsats Institute of Information
Securities and Exchange Commission Technology (CIIT)
of Pakistan (SECP) University of Punjab
Pakistan Telecommunication Company Limited The Bank of Punjab
Oil and Gas Development Company Zarai Taraqiati Bank (ZTB) Ltd
Limited (OGDCL) First Women Bank Ltd
Pakistan State Oil (PSO) Muslim Commercial Bank (MCB) Ltd
Water and Power Development Shezan International Ltd
Authority (WAPDA) Mecca Cola Beverages Pvt. Ltd
Pakistan International Airlines (PIA) Haleeb Ltd
State Life Insurance National Engineering Services Pakistan (Pvt.) Limited (NESPAK)
Source: Company documents.
ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Exhibit 4
Suggested Policy Statement for Loan Grant, Absenteeism and Mobile Usage
To: Chief Executive Officer
Subject: Suggested New Loan Policy

Dear Mr Intisar,

Based on our earlier exchange of ideas, I hereby propose that the following conditions be included in
the new loan policy being introduced at Affluent:

The loan amount requested must be in accordance to the salary structure of the employee and
recoverable within 6 months, through deduction from salaries.
No loan amount greater than the sum of two months’ salary will be approved.
The employees have to present documented evidences of the genuineness of their request.
A second loan cannot be applied for if any previous loan is unsettled.
No more than two loans can be applied for, per year.
The loan amount does NOT ensure job security. If an employee resigns/quits or gets terminated
after taking a loan, the remaining sum will have to be returned within a period of one month,
failing which he will be subjugated to legal action.

In addition, our department also suggests the following stances to appropriately manage the soaring rate
of absenteeism and leave at Affluent:

No absenteeism should be allowed without salary deduction.


A 45-minute delay, beyond official arrival time of 8:30 a.m. should be counted as an
absenteeism deserving of salary deduction.
No more than two leaves should be granted, per employee, per month.
Any unavailed leave should be compensated monetarily equal to one day’s salary, at year’s end.
The leave application must be submitted 24 hrs beforehand, for being eligible of grant.

Finally, it is also suggested that a fixed sum of money be allotted to individuals, on account of mobile
usage based on departmental needs. Thus, a sum of Rs 500 seems sufficient for the CS department, while
Rs 200 should suffice for members of all other departments.

Zaheer Ahmad, Director HRM


Source: Company documents.

HRM AT AFFLUENT ADVERTISING (PVT.) LTD 193


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Exhibit 5
Structural Changes at Affluent

Source: Company documents.

194 FAIZA MUHAMMAD AND FARZAD RAFI KHAN


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Exhibit 6
Individual Evaluation Form
Part A: Personality Traits (15%)
Instructions
Please use the below mentioned rating scale to evaluate the individual’s behavioral traits. All traits are
from organizational perspective, especially trustworthiness.
Rating Scale
0 Poor
1 Bare minimum level
2 Above average
3 Good
4 Excellent

Performance Competencies Weightage (W %) Rating (R) Net Result (W%∗R)


1. Professional Integrity and Honesty 2
2. Commitment and Loyalty 5
3. Resourceful/Helpful/Cooperative 3
4. Charisma/Personal Aura/Source of 3
Inspiration and Motivation
5. Neatness/Hygiene/Workplace Condition 2

Part B: Goal Attainment Evaluation Form (35%)


Instructions
Rate the evaluatee’s performance based on the actual achievement of goals assigned. Multiply this
rating with the weightage and calculate the weighted score for each goal.
Rating Scale
0 Poor
1 Bare minimum level
2 Above average
3 Good
4 Excellent

Actual Weighted
Key Goals Weightage % Target Achievement Rating Rating
Applicable for CSD
Increase revenue from existing 15
customers
Decrease cost of service 5
Number of visits to clients· 5
(Exhibit 6 continued)

HRM AT AFFLUENT ADVERTISING (PVT.) LTD 195


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

(Exhibit 6 continued)
Actual Weighted
Key Goals Weightage % Target Achievement Rating Rating
Recovery targets for accounts 10
receivable
Applicable for Creative
Increase revenue from existing 15
customers
Decrease cost of service 5
Numbers of ads approved 10
Applicable for Media
Decrease cost of service 20
Number of jobs handled 10
Credit period from creditors 5
Applicable for Admin & Finance
Decrease cost of service 15
Time taken to generate reports 10
Time taken to update records for 10
accuracy

Part C: Performance Behaviors (50%)

Performance Competencies Weightage (W%) Rating Net Results (W%*R)


1- Communication and Presentation Skills
Oral and written comprehension
Language structuring and vocabulary
Convincing power to sell an idea
through articulate, sell and defend concepts
‘You Attitude’
Adapting presentation style according to 15%
requirements
Level of being respectful/considerate/
mannerly/enduring
Restrains emotional impulses
Responds calmly
Listening actively and responding sensibly
Effective use of empathy
Effectively planning, prioritizing and
sequencing events to meet deadlines

196 FAIZA MUHAMMAD AND FARZAD RAFI KHAN


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Performance Competencies Weightage (W%) Rating Net Results (W%*R)


2- Relationship Building and Networking
Client insight and intuition; the ability to 15%
intuit/anticipate the clients needs, read
between the lines and design/create value
added solutions and relationships
Research-based knowledge of own and client
business
Clearly narrating requirements to (internal/
external) individuals
Keeping status checks and maintaining
coordination till projects assigned are
completed
3- Personal and Corporate Effectiveness
Professional confidence
Result orientation
Commitment to learning
Organizational awareness 10%
Knowledge of skills relevant to job
Active participation in brainstorming sessions
4- Punctuality/Observance of Work Hours 10%

Total Rating Points (b) = ________


Overall Rating

0–99 100–199 200–299 300–399


Below Average Above Average Good Excellent
Remarks
____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________
____________________________________________________________________________________________
_________________________________________________________

Signature HR Manager: _________ Signature Supervisor: _________


Source: Company documents.

HRM AT AFFLUENT ADVERTISING (PVT.) LTD 197


ASIAN JOURNAL OF MANAGEMENT CASES, 7(2), 2010: 177–198

Exhibit 7
New Loan Policy
To: All Organizational Members
From: Chief Executive Officer
Subject: New Loan Policy
Dear all!
This is to inform you that a new loan policy has been devised by The Company and states as under:

The loan amount requested must be in accordance to the salary structure of the employee and
recoverable within 6 months through deduction from salaries.
No loan amount greater than the sum of two months’ salary will be approved.
The employees have to present documented evidences of the genuineness of their request.
The employees must sign a contract stating the promised period of return.
A second loan cannot be applied for if any previous loan is unsettled.
No more than two loans can be applied for, per year.
The loan amount does NOT ensure job security.
If an employee resigns/quits or gets terminated after taking a loan, the remaining sum will have
to be returned within a period of one month, failing which he will be subjugated to legal action.
Source: Company documents.

Exhibit 8
New Mobile Usage Policy
To: All Organizational Members
From: Chief Executive Officer
Subject: Revised mobile usage policy
Dear all!
This is to inform you that company has restructured the cell-phone packages and allowed and assigned
certain free minutes to each organizational member, according to their anticipated mobile usage.
According to the new policy:

1. The company will only pay for the line rent and tax charges for each employee’s mobile
usage cost.
2. Within the free minutes allocated to each employee, he/she will NOT be charged additionally and
NO deductions will be made from salaries.
3. If an employee exceeds his/her mobile usage limit, s(he) will be responsible for the payment of
additional charges, failing to do so will result in disciplinary action.

PS: Mr Shabbir of Accounts Department has a list of free minutes allocated to members of different
departments.
Source: Company documents.

198 FAIZA MUHAMMAD AND FARZAD RAFI KHAN